22nd Century (XXII) Newsfile·2024-11-12 11:00Core Insights - 22nd Century Group reported a decrease in net revenues for Q3 2024, totaling $5.9 million, down 24.5% from $7.9 million in Q2 2024. The company aims to achieve cash positive operations by Q1 2025 [2][4][5]. Financial Performance - Net revenues decreased to $5.9 million from $7.9 million, with a gross profit loss of $(0.6) million compared to a profit of $0.6 million in the previous quarter [4][10]. - Operating loss increased to $3.4 million from $2.0 million, and net loss rose to $3.6 million from $2.2 million [4][10]. - Basic and diluted EPS decreased to $(0.27) from $(0.30) [4][10]. - Adjusted EBITDA loss increased to $3.2 million from a loss of $2.6 million [4][10]. Product Line Performance - Cigarette net revenues increased to $4.1 million, an 18% rise compared to $3.5 million in the prior year, despite a 22% decline in carton volumes [6][12]. - Filtered cigars net revenues decreased to $1.7 million from $4.1 million in the prior year, reflecting lower volumes due to the completion of last time buy orders [7][12]. - Cigarillo distribution net revenues amounted to $0.2 million, compared to $0 in the prior year quarter [8][12]. - VLN® cigarette net revenues were negligible in Q3 2024, with the company planning to rebrand and relaunch these products [9][12]. Strategic Initiatives - The company is transitioning from a financial focus to a growth strategy that leverages its manufacturing and brand assets [5][6]. - Plans to launch additional products, including VLN® SKUs, are underway to expand distribution and consumer awareness [6][12]. Debt and Liquidity - Net debt improved to $3.0 million from $7.0 million in the preceding quarter [4][10]. - Total debt decreased to $7.0 million from $13.9 million, with net total debt at $2.98 million [32]. Overall Outlook - The company remains focused on achieving EBITDA breakeven results in Q1 2025, with expectations for revenue growth driven by changes in its core CMO business [5][6].